WHAT IS MEDICAL ASSISTANCE PLANNING?
June 3, 2008
INTRODUCTION
You worked hard all your life and saved in order to provide for your retirement needs. Now, if you or your spouse needs long term care, you face the prospects of having everything go to the government. There are steps you can take to prevent this. You can structure your assets so you are eligible for Medical Assistance.
1. What is Medical Assistance? Medical Assistance is a combination of State and Federal programs designed to help low and moderate income individuals with their medical expenses. While in Minnesota this program is known as Medical Assistance, on a national basis it is known as Medicaid. There are two components of Medical Assistance: long term care and medical expenses. Long term care includes nursing home expenses, assisted living, and home care. Medical expenses include physician services, hospitalization, and medications.
2. Why might it be wise to do planning? Before a single person can be eligible for Medical Assistance, he/she can have no more than $3,000 in available assets. If the value of the assets you own exceeds $3,000, the county will require that you spend your assets until you reach the $3,000 level. For example:
Your assets ..................................................................$70,000
Medical Assistance Asset Allowance ............................$3,000
Amount needed to reduce assets ................................$67,000
Rather than simply spending these assets on nursing home care, there are alternatives. Some or all of this money can be a) transferred to children, b) used to purchase things for yourself, c) used to prepay burials, etc. (All of these strategies must comply with government regulations).
3. What asset levels do people have that are doing Medical Assistance planning? Most of our clients have between $50,000 and $500,000. If you have less than this, the savings might not be dramatic. If you have more than this, you might have enough income to pay for a nursing home without invading your assets.
4. How much do nursing homes cost? Nursing homes in Southern Minnesota typically run between $4,000 and $6,000 per month depending on the level of care needed. At a moderate level of care, the monthly expense will run $4,800. A nursing home stay at this level for two years runs about $100,000.
5. Who goes into nursing homes? Our experience is that people of modest means who contract long-term debilitating disease are most likely to go into nursing homes. Diseases such as stroke, dementia (including Alzheimers), and Parkinsons disease are examples of diseases that could result in nursing home admission. On the other hand, a disease such as terminal cancer is usually managed without a nursing home admission.
6. What do we charge to talk about nursing home planning? Our initial fee is $200.00. If it appears that we can help, we will prepare a planning letter for an additional $600. We charge additional fees for helping someone qualify for the program.
Contact our office to schedule an appointment to discuss how Medical Assistance Planning can benefit you or a family member.